Article | Last updated: 22/08/2014
1. What is the International Energy and Climate Initiative – Energy+?
2. Why Energy+?
3. What does the plus mean?
4. Who initiated Energy+?
5. What is the status of the Energy+ Partnership?
6. What are the Energy+ Guiding Principles?
7. Poor countries need energy services; why does Energy+ focus only on renewable energy and energy efficiency to support this need?
8. How can we help countries without access to renewable and clean energy?
9. Why is it important with more renewable energy and energy efficiency?
10. Why does Norway do this?
11. How will Energy+ support developing countries?
12. What is the relationship between Energy+ and the SE4ALL initiative?
13. Energy+ dialogue with private sector and identification of business models
14. Energy+ achievements
The Norwegian government launched the International Energy and Climate Initiative – Energy+ together with the UN Secretary General on 10 October 2011. The initiative aims to increase access to modern energy services and reduce or avoid greenhouse gas emissions by implementation of renewable energy and energy efficiency in developing countries. Additional support from the international society and commercial investors is required to scale up efforts. Energy+ will provide financial support to developing countries based on independently verified results in the terms of increased access to energy services by implementation of renewable energy and energy efficiency programs and projects.
The world faces two interrelated problems that the Energy+ will address:
- 1.2 billion people have no access to electricity and 2.8 billion people still use charcoal and biomass, in an inefficient way, for cooking and heating.
- Global greenhouse gas emissions must be reduced. 60% of the global greenhouse gas emissions are related to energy production and consumption. If global warming shall be limited to 2oC, the increased demand for energy has to be met by renewable energy and energy efficiency.
Official Development Assistance (ODA) is insufficient to cover the huge investments need. Energy+ will use ODA strategic to finance policy measures necessary to leverage private and commercial investments in renewable energy and energy efficiency projects.
The plus signifies our integrated efforts to support universal access to sustainable energy based on renewable energy sources and improved energy efficiency and thereby reduce greenhouse gas emissions.
The Government of Norway initiated Energy+, inspired by experiences with the Reducing Emissions from Deforestation and Forest Degradation (REDD) initiative. The outlines of the concept was discussed with other donor countries, developing countries, private sector representatives, international organizations and civil society organizations over a year and a half before deciding to launch it in October 2011.
Nearly fifty-five countries and organizations have signed up to the Energy+ Partnership. This comprises developing countries (e.g. Ethiopia, Kenya, Maldives, Senegal), developed countries (e.g. UK, Denmark, France, Norway), UN agencies (UNDP, UNEP, UNIDO), multilateral development banks (World Bank, ADB, IDB, AfDB), international organizations (e.g. IEA, OECD), private sector (WBCSD), think-tanks (e.g. CCAP) and civil society (e.g. WWF).
The Energy+ Partnership is voluntary and open to all interested actors endorsing the guiding principles. Many of the Partners are represented in the Energy+ Technical Working Group responsible for further conceptual development and strategic advice with regards to operations at the country level.
Energy+ actions will be guided by the following principles:
- Sectoral approach: Energy+ supports developing country actions in the energy sector through best-practice policy reforms, technical assistance and at scale payments by results on a sector level. Sectoral approach encourage donor coordination and ensure implementation of the most cost-effective projects. Energy+ promotes transformational change by addressing the whole energy sector. Activities will be country-driven and support developing country Partners’ energy and low carbon development and poverty reduction strategies. Work through existing programs and institutions, thereby limiting transaction costs and speeding up progress. National and international social and environmental standards will be applied.
- Payment by results: The Energy+ Partnership intends to provide payment by results based on achieved outcomes in terms of increased access to sustainable energy services by implementation of renewable energy and energy efficiency.
- Leveraging private and commercial investments: The payment by results will be used to incentivize private and commercial investments in renewable energy and energy efficiency programs and projects. This will be an additional finance resource to develop policy measures on a sectoral level.
- Three-phased approach: Energy+ will apply a three-phased approach to country engagement:
o Phase one: support for development of strategic plans (e.g. low-carbon and energy sector strategies), improved legislation and policy and regulatory reforms, where needed, including support to capacity building.
o Phase two: Support to implementation of required plans, policies and regulatory measures and incentive mechanisms for transformation change, and to build the necessary capabilities (including measurement, reporting and verification (MRV)) to enable payment by results, and development of results-based policy measures to leverage private and commercial sector investment.
o Phase three: Provision of payment by results at sectoral level according to the outcomes achieved in terms of increased access to sustainable energy services by implementation of renewable energy and energy efficiency.
Poor countries need increased access to energy services to enable economic and social development, and they will use the energy sources that are most convenient and less perceived costs. The International Energy and Climate Initiative – Energy+ will support development of policy measures to make renewable energy and energy efficiency an economically viable choice for those countries that to avoid long-term lock-in to fossil fuel. Renewable energy has in general low operational cost, however, large upfront capital costs. In some developing countries, large hydropower will be the cheapest solution. As of today, developing countries often have to choose the energy solutions with lowest upfront costs, i.e. often fossil fuel based technology. Many countries then go on to spend a large share of their financial resources to import running fuels such as oil, diesel and kerosene, which can contribute to energy insecurity and foreign exchange reserve depletion, as well as climate change.
Most countries have some potential to use renewable energy sources. In developing countries wood and charcoal is the primary source of energy. The energy efficiency is in general low. Most countries have large energy potential in their solar and wind resources. Some have large untapped hydropower and geothermal potential (although the latter has high-risk development costs). The upfront investments in renewable may be high, but through strategic use of Official Development Assistance to cover the incremental cost it is possible to facilitate commercial investments and realize the renewable energy potential.
Without increased use of renewable energy and energy efficiency, the total greenhouse gas emissions will increase, and lock-in to unsustainable energy will take place, making it impossible to limit global warming to 2oC with potentially catastrophic climate consequences and therefore society as a whole.
When it comes to energy and climate, Norway has the experience, the knowledge, the industry and resources to make a difference. There are many initiatives, but few who are at scale, have the ability to coordinate and ensure a concerted effort. Through The Government of Norway's International Climate and Forest Initiative, we have proven ability to make a difference also in climate change negotiations. In addition to this, Norway is active on various arenas to develop different approaches to climate financing. We wish to use these experiences and apply it to the Energy+ Partnership.
Norway spent NOK 2 billion in 2013 to support renewable energy, transmission and distribution of electricity, as well as capacity building in developing countries.
Financial support from Energy+ will be based on achieved results in terms of increased access to sustainable energy services by implementation of renewable energy and energy efficiency. This includes support to measures taken to establish policies and regulations that bring about increased commercial investments. Developing countries may use the support to strengthen the enabling environment to attract private and commercial investments in the energy sector.
The United Nations Secretary-General launched his personal ‘Sustainable Energy for All’ (SE4ALL) initiative in September 2011 with three inter-related objectives:
- Universal access to sustainable energy by 2030
- Doubling of the rate of improvement in energy efficiency by 2030
- Doubling of the share of renewable energy in the global energy mix by 2030.
A high-level group supported by a technical group has developed an action framework entitled “Sustainable Energy for All: A Global Action Agenda– Pathways for Concerted Action toward Sustainable Energy for All.”
Energy+ shares the same objectives as SE4ALL and while the SE4ALL is a coordinating framework Energy+ aims to be an implementing initiative focusing on supporting developing countries to increase access to sustainable energy and reduce emissions of greenhouse gases by renewable energy and energy efficiency. While SE4ALL is global and fuel-neutral, Energy+ targets to developing countries that want support to develop their renewable energy sector, improve access and energy efficiency.
The Energy+ Partnership organizes dialogues with private sector representatives of various scale (small to medium enterprises to larger corporations) and relevant sectors (renewable energy manufacturers, financial service provides, etc.). Based on these consultations four key interventions areas are emerging:
- Support preparation of national energy and climate strategies:
- National plans with results-based financing approach; share expertise and experiences; removal og subsidies and import tariffs
- Gathering and disseminating information necessary to make investment decisions and design successful projects:
- Support feasibility studies and resource assessment studies; disseminate information on project successes; develop a climate registry
- Development of a regulatory framework for investments and contracts:
- Set up a one-stop shop or fast tracking mechanism for projects approval; sharing of experiences on developing legal frameworks with compliance mechanisms; unbundle the power sector; develop standardized PPAs.
- Innovative and alternative financing models:
- Blend donor and investor resources; enhance liquidity of local financial institutions; provide zero-interest loans; extend loan maturities; reverse seed investments; establish off-take markets for carbon credits.
- Ethiopia: Ethiopia has developed a Climate Resilient Green Economy strategy outlining Ethiopia’s ambitions to become a middle-income country by 2025 and keeping the emissions at today’s level. In Ethiopia where only 17% of the population has access to electricity, Norway has entered into a five-year, NOK 500 million agreement to support efforts to increase access to sustainable energy in rural areas. This aims to enable the installation of 9 million new and improved cook-stoves by 2015, which will result in emissions reductions of 14 million tCO2/year. The UK and Norway are also supporting the establishment of a Climate Innovation Centre (CIC).
- Liberia: Due to the civil war, there is an urgent need for increased access to electricity in Liberia. The payment will contribute to leverage commercial investments. Currently, diesel generators cover the need for electricity supply. Liberia has the potential to switch to power generation from hydro, biomass and solar energy, and reduce their dependence on imported fossil fuel. Liberia and Norway entered into a five-year agreement on Energy+ cooperation to support the development and implementation of a National Energy and Climate Plan. Initially, the Energy+ will provide funding in terms of payment by results as part of the financing of the SREP Investment Plan (Scaling-up Renewable Energy Program). The World Bank and the African Development Bank will be responsible for the establishing of mini-grids in rural parts of Liberia. In addition, Energy+ support capacity building an technical assistance.
- Kenya: Energy+ will initially provide support to implement the ‘Kerosene Free Kenya’ program focusing on solar home systems and cook stoves. Use of kerosene is costing Kenya about $500 million annually. Will seek to build over time an overall approach to the energy sector on renewable energy and energy efficiency policy so that the Partnership will contribute to achieving the targets set in Kenya’s Vision 2030. Kenya and Norway entered into a five-year, NOK 250 million agreement to support increased access to sustainable energy and reduced greenhouse gas emissions by replacing kerosene lamps with solar lanterns and producing and distributing improved cook-stoves to enable more efficient and environmentally-friendly cooking.
- Bhutan: Bhutan aims to achieve full access to electricity by 2015. The Energy+ cooperation with Bhutan aims to support efforts to increase access to electricity, heating, cooking and processing requirements. Energy+ will support efforts to increase output from renewable energy resources through capacity building, institution and legislation reform, support development of renewable energy master plan; and support energy efficiency programs to enhance energy security. In Bhutan, Norway has entered into a five-year, NOK 100 million agreement to increase access to energy services and reduce emissions of greenhouse gases from the energy sector. Here, energy efficiency improvements could save 5-8 MW of electricity during peak demand periods, while renewable energy and improved energy efficiency could reduce emissions by 49%.
- Nepal: The Government of Nepal has signed a framework for Energy+/ SE4All cooperation with Denmark, Norway, the Asian Development Bank (ADB) and UNDP. Denmark will be the lead donor partner. The scope is to provide support off-grid renewable energy to enhance rural electrification, promote technologies as biogas and improved cook-stoves, support and develop incentives to hydropower and grid-solar power development, transmission and distribution lines, support efforts to increase energy efficiency in households and commercial sectors.